Blugrass Announces Letter of Intent to Acquire Producing Properties

     Blugrass Announces Letter of Intent to Acquire Producing Properties

  PR Newswire

  DALLAS, May 20, 2011

DALLAS, May 20, 2011 /PRNewswire/ -- Blugrass Energy Inc. (OTC.BB: BLUGD),
currently doing business as Rio Grande Petroleum Inc., today announced that it
has entered into negotiations to acquire a non-operating minority interest in
producing oil and gas properties located in Texas and Oklahoma. The
properties are comprised of over 90 producing wells, and the minority
ownership interest ranges from 2% to 7% per well.

The properties under lease are managed by several nationally-renowned
operating companies. Supported by an independent engineering report, the
properties are reported to have a PV10 value of proven reserves of
approximately $50 million, and the properties currently generate in the range
of $400,000 monthly revenue for the owner of the minority interest.

The Letter of Intent is non-binding and the proposed acquisition would be
subject to normal contingencies, including valuation of the properties and
financing. The Company anticipates funding the proposed acquisition and its
future development efforts in part, with a combination of traditional bank
financing, plus other financing to be arranged through the Company's
investment banking professionals.

As earlier announced, the Company is building a portfolio of oil and natural
gas projects, and this project, with its large number of oil and gas producing
wells, would provide an immediate portfolio effect for the Company's
shareholders. This project would also afford the Company an opportunity to
add value – in reserves and cash flow -- as additional drilling opportunities
arise on the properties under lease, since the area contains significant
proven undeveloped reserves.

The Company will provide updates on the progress of this proposed acquisition,
as well as updates on the Company's drilling and development plans for
properties which it currently owns.

INVESTOR CONTACTS: Abram Janz, President & CEO
                   Blugrass Energy Inc.
                   Tony R. Collins
                   Investor Relations
                   877.511.0110

We invite you to visit the company's website at www.riograndepetroleum.com .

FORWARD LOOKING STATEMENTS SAFE HARBOR

This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements give our current
expectations or forecasts of future events. They include our plans to drill
oil and gas wells on the lease lands in a search for economically recoverable
reserves. Actual results could differ materially as a result of a variety of
risks and uncertainties. See the description of risks related to our business
in the documents that the company files with the SEC on Forms 10-K, 10-Q and
8-K. We caution you not to place undue reliance on our forward-looking
statements, which speak only as of the date of this news release, and we
undertake no obligation to update this information.

Further information will be available on the company's website, where the
company will routinely post announcements, updates, events, investor
information and presentations, and all recent press releases.

SOURCE Blugrass Energy Inc.

Website: http://www.riograndepetroleum.com
 
Press spacebar to pause and continue. Press esc to stop.